STATE OF THE NATION ADDRESS BY PRESIDENT CYRIL RAMAPHOSA

CAPE TOWN CITY HALL

10 FEBRUARY 2022

Speaker of the National Assembly, Ms Nosiviwe Mapisa-Nqakula,

Chairperson of the National Council of Provinces, Mr Amos Masondo,
Deputy President David Mabuza,
Former President Thabo Mbeki,
Former Deputy President Phumzile Mlambo-Ngcuka,
Former Deputy President Baleka Mbete,
Former Speaker of the National Assembly, Mr Max Sisulu,
Acting Chief Justice Raymond Zondo,
Mayor of the City of Cape Town, Mr Geordin Hill-Lewis,
Dean of the Diplomatic Corps, Mr Bene M'Poko,
Members of the Judiciary,
Heads of Institutions Supporting Democracy,
Members of Parliament,
Fellow South Africans,

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This year, for the first time since the dawn of our democracy, the State of the Nation
Address is not being delivered in the Chamber of the National Assembly.

As we entered this new year, a huge fire engulfed the seat of our democracy.

We all watched in outrage and sadness as the flames devoured the buildings in
which our democratic Constitution was born, in which laws of transformation and
progress have been passed, in which the freely-chosen representatives of the
people have shaped our young nation.

For many, what happened in Parliament speaks to a broader devastation in our land.

For many, the fire was symbolic of the devastation caused by the COVID-19
pandemic, by rising unemployment and deepening poverty.

It spoke to the devastation of a pandemic that over the past two years has taken the
lives of tens of thousands of South Africans, put two million people out of work and
brought misery to families.

The fire in Parliament reminded us of the destruction, violence and looting that we
witnessed in parts of the country in July last year, of the more than 300 lives lost and
many more livelihoods ruined.

As we reflect on the past year, we recall the words of President Thabo Mbeki who
reminded us that: “Trying times need courage and resilience. Our strength as a
people is not tested during the best of times.”

That we are gathered together in the Cape Town City Hall instead of the National
Assembly Chamber reflects the extraordinary circumstances of this time.

It reflects the determination of the Presiding Officers of Parliament and indeed all the
members of our two Houses that the work of this democratic institution should
continue without interruption.

There are moments in the life of a nation when old certainties are unsettled and new
possibilities emerge.

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In these moments, there is both the prospect of great progress and the risk of
reversal.

Today, we are faced with such a moment.

The path we choose now will determine the course for future generations.

That is why we are taking steps to strengthen our democracy and reaffirm our
commitment to a Constitution that protects us all.

We are working together to revitalise our economy and end the inequality and
injustice that impedes our progress.

We are standing together against corruption and to ensure that those who are
responsible for state capture are punished for their crimes.

We are rebuilding the state and restoring trust and pride in public institutions.

If there is one thing we all agree on, it is that the present situation – of deep poverty,
unemployment and inequality – is unacceptable and unsustainable.

There is agreement among a broad and diverse range of South Africans that
fundamental reforms are needed to revive economic growth.

There is a need both to address the immediate crisis and to create conditions for
long-lasting stability and development.

To achieve this, South Africa needs a new consensus.

A consensus that is born out of a common understanding of our current challenging

situation and a recognition of the need to address the challenges of unemployment,
poverty and inequality.

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This should be a new consensus which recognises that the state must create an
environment in which the private sector can invest and unleash the dynamism of the
economy.

But equally an environment in which South Africans can live a better life and unleash
the energy of their capabilities.

This should also be a new consensus which embraces our shared responsibility to
one another, and acknowledges that we are all in this together.

As the social partners – government, labour, business and communities – we are

working to determine the actions we will take together to build such a consensus.

We have begun discussions on what trade-offs are needed and what contribution we
will each need to make.

We have given ourselves 100 days to finalise a comprehensive social compact to

grow our economy, create jobs and combat hunger.

This work will build on the foundation of the Economic Reconstruction and Recovery
Plan, which remains our common programme to rebuild the economy,

We remain focused on the priorities we identified in the State of the Nation Address
last year:

- overcoming the COVID-19 pandemic,

- a massive rollout of infrastructure,

- a substantial increase in local production,

- an employment stimulus to create jobs and support livelihoods,

- the rapid expansion of our energy generation capacity.

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To be effective, this social compact needs to include every South African and every
part of our society.

No-one must be left behind.

Fellow South Africans,

When I last addressed the state of our nation, we were deep in the throes of the
worst pandemic in more than a century.

Since COVID-19 reached our shores, we have endured successive waves of

infection, the emergence of new variants and the devastating cost of nearly 100,000
recorded COVID-19 deaths.

South Africans have responded to this grave threat with courage and resilience, with
compassion and restraint.

Over the past two years, we have taken unprecedented actions to strengthen our
health system, build laboratory capacity and prevent infections.

The nation owes a great debt of gratitude to the dedicated health care workers and
other frontline staff who put their health and their lives at risk to care for the ill and
vulnerable during this pandemic.

Within weeks of the first reported infection in our country, I announced the
establishment of the Solidarity Fund, with the goal of uniting the country in the fight
against the pandemic.

In a wave of generosity that swept the country, the Fund raised R3.4 billion from
more than 300,000 individuals and 3,000 companies and foundations. More than 400
individuals and 100 companies volunteered their time and services.

The Fund has played a pivotal role in supporting the national health response and
alleviating the humanitarian crisis.

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I would like to thank everyone who contributed to the Solidarity Fund and the great
many who came together in countless other initiatives to support those affected by
the pandemic.

As the trajectory of the pandemic has continued to change, we have had to adapt
and evolve.

Our approach has been informed throughout by the best available scientific
evidence, and we have stood out both for the quality of our scientists and for their
involvement in every step of our response.

During the past year, we have focused on accelerating our vaccine rollout.

So far, we have administered 30 million doses of COVID-19 vaccines. Consequently,

nearly 42% of all adults and 60% of everyone over 50 is fully vaccinated.

We are now ready to enter a new phase in our management of the pandemic.

It is our intention to end the national state of disaster as soon as we have finalised
other measures under the National Health Act and other legislation to contain the
pandemic.

Nearly all restrictions on economic and social activity have already been lifted.

Vaccines have proven to be the best defence we have against illness and death from
COVID-19.

If we all get vaccinated, continue to observe basic health measures and remain ever
vigilant, we will be able to get on with our lives even with the virus in our midst.

The state of the nation is linked inextricably to the state of our economy.

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In addition to the divides of race, geography and education, COVID-19 has
exacerbated the divide between those who are employed and unemployed.

Last year, our unemployment rate reached its highest recorded level.

Unemployment has been caused by low growth, which has in turn resulted from a
long-term decline in investment.

In the last year, we have benefited from a clear and stable macroeconomic
framework, strong commodity prices and a better-than-expected recovery.

However, we have been held back by an unreliable electricity supply, inefficient

network industries and the high cost of doing business.

We have been taking extraordinary measures to enable businesses to grow and

create jobs alongside expanded public employment and social protection.

We all know that government does not create jobs. Business creates jobs.

Around 80 per cent of all the people employed in South Africa are employed in the
private sector.

The key task of government is to create the conditions that will enable the private
sector – both big and small – to emerge, to grow, to access new markets, to create
new products, and to hire more employees.

The problems in the South African economy are deep and they are structural.

When electricity supply cannot be guaranteed, when railways and ports are
inefficient, when innovation is held back by a scarcity of broadband spectrum, when
water quality deterioriates, companies are reluctant to invest and the economy
cannot function properly.

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With a view to addressing these challenges we are accelerating the implementation
of far-reaching structural reforms to modernise and transform these industries,
unlock investment, reduce costs and increase competitiveness and growth.

The electricity crisis is one of the greatest threats to economic and social progress.

In the last few days, we have once again been reminded of the fragility of our
electricity system.

Load shedding continues to have a huge impact on the lives of all South Africans,
disrupting business activities, and placing additional strains on families and
communities.

Due to our aging power stations, poor maintenance, policy missteps and the ruinous
effects of state capture, our country has a shortfall of around 4,000 MW of electricity.

During the past year, we have taken firm steps to bring additional generation
capacity online as quickly as possible to close the shortfall.

As a result, several new energy generation projects will be coming online over the
next few years. This includes:

- Over 500 MW from the remaining projects in Bid Window 4 of the renewable
energy programme, which are at advanced stages of construction.

- 2,600 MW from Bid Window 5 of the renewable energy programme, for which
the preferred bidders were announced last year,

- up to 800 MW from those risk mitigation power projects that are ready to
proceed,

- 2,600 MW from Bid Window 6 of the renewal energy programme, which will
soon be opened,

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- 3,000 MW of gas power and 500 MW of battery storage, for which requests
for proposals will be released later this year,

- an estimated 4,000 MW from embedded generation projects in the mining

sector,

- approximately 1,400 MW currently in the process of being secured by various

municipalities.

In addition to closing the energy supply shortfall, we are implementing fundamental

changes to the structure of the electricity sector.

Eskom has established a separate transmission subsidiary, and is on track to

complete its unbundling by December 2022.

The utility has continued with its intensive maintenance programme, to reverse many
years of neglected maintenance and underperformance of existing plants.

To regulate all of these reforms, Cabinet yesterday approved amendments to the

Electricity Regulation Act for public comment.

These far-reaching amendments will enable a competitive market for electricity

generation and the establishment of an independent state-owned transmission
company.

Our economy cannot grow without efficient ports and railways.

Over several years, the functioning of our ports has declined relative to ports in other
parts of the world and on the African continent. This constrains economic activity.

The agricultural sector, for example, relies heavily on efficient, well-run ports to
export their produce to overseas markets.

Fresh produce cannot wait for days and even weeks stuck in a terminal.

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This hurts businesses and compromises our country’s reputation as an exporter of
quality fresh produce.

Transnet is addressing these challenges and is currently focused on improving

operational efficiencies at the ports through procuring additional equipment and
implementing new systems to reduce congestion.

Transnet will ask for proposals from private partners for the Durban and Ngqura
Container Terminals within the next few months, which will enable partnerships to be
in place at both terminals by October 2022.

Transnet will start the process of providing third-party access to its freight rail
network from April 2022 by making slots available on the container corridor between
Durban and City Deep in Gauteng.

Transnet has developed partnerships with the private sector to address cable theft
and vandalism on the freight rail network through advanced technologies and
additional security personnel.

This collaborative effort is already showing results in reduced disruptions to rail

operations.

The poor state of passenger rail in South Africa has a direct and detrimental impact
on the lives of our people.

We are therefore working hard to rehabilitate the passenger rail network in 10 priority
corridors.

The Southern Line in Cape Town and the Mabopane Line in Pretoria have been re-
opened to be followed by the remaining lines in the next year.

One of the greatest constraints on the technological development of our economy

has been the unacceptable delay in the migration of broadcasting from analogue to
digital.

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The switch-off of analogue transmission has been completed in a number of
provinces.

As I announced in the State of the Nation Address last year, the other provinces will
move to digital signal by the end of March 2022.

As part of this process, government will continue to subsidise low-income

households so that they can access a set-top box and make the switch to digital TV.

Our communications regulator, ICASA, will commence with the auctioning of the high
frequency communications spectrum in about three weeks from now.

This will unlock new spectrum for mobile telecommunications for the first time in over
a decade.

In addition, we will facilitate the rapid deployment of broadband infrastructure across

all municipalities by establishing a standard model for the granting of municipal
permissions.

These reforms will revolutionise the country’s technological development, making

faster broadband accesible to more people and reducing the costs of digital
communications.

The world over, the ability to attract skilled immigrants is the hallmark of a modern,
thriving economy.

We are therefore streamlining and modernising the visa application process to make
it easier to travel to South Africa for tourism, business and work.

As we committed last year, the eVisa system has now been launched in 14
countries, including China, India, Kenya and Nigeria.

The revised Critical Skills List has been published for the first time since 2014,
following detailed technical work and extensive consultations with business and
labour. The updated list reflects the skills that are in shortage today, to ensure that
our immigration policy matches the demands of our economy.

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A comprehensive review of the work visa system is currently underway, led by a
former Director-General of Home Affairs, Mr Mavuso Msimang.

This review is exploring the possibility of new visa categories that could enable
economic growth, such as a start-up visa and a remote working visa.

Water is the country’s most precious natural resource.

It is vital to life, to development and to economic growth.

That is why we have prioritised institutional reforms in this area to ensure future
water security, investment in water resources and maintenance of existing assets.

We have embarked on the process of institutional reform in capacitating the

Department of Water and Sanitation and reviewing water boards in as far as their
mandates are concerned and ensuring that they serve municipalities in terms of the
District Development Model.

These reforms are being championed by the Minister of Water and Sanitation, who
has visited every water source in the country.

A comprehensive turnaround plan is being implemented to streamline the process

for water use license applications. The target is to clear the backlog of applications
by June 2022 and to process 80% of all applications within 90 days during the next
financial year.

Legislation has been prepared for the establishment of the National Water
Resources Infrastructure Agency, and will be published for public comment within
the next month.

The water quality monitoring system has been reinstated to improve enforcement of
water standards at municipal level, and enable the Department of Water and
Sanitation to intervene where water and sanitation services are failing.

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We will review the policy and regulatory framework for industrial hemp and cannabis
to realise the huge potential for investment and job creation.

While structural reforms are necessary for us to revive economic growth, they are
not enough on their own.

This year, we are undertaking far-reaching measures to unleash the potential of

small businesses, micro businesses and informal businesses.

These are the businesses that create the most jobs and provide the most
opportunities for poor people to earn a living.

We have started discussions with social partners as part of the social compact
process to review labour market regulations for smaller businesses to enable them to
hire more people, while continuing to protect workers’ rights.

A new, redesigned loan guarantee scheme is being introduced to enable small

businesses to bounce back from the pandemic and civic unrest.

This new bounce-back scheme incorporates the lessons from the previous loan
guarantee scheme.

It will involve development finance institutions and non-bank SME providers in

offering finance, expand the types of financing available and adjust eligibility criteria
to encourage greater uptake.

The National Treasury is working with industry stakeholders to finalise the scheme
and will provide details soon.

We are reviewing the Business Act – alongside a broader review of legislation that
affects SMMEs – to reduce the regulatory burden on informal businesses.

There are too many regulations in this country that are unduly complicated, costly
and difficult to comply with. This prevents companies from growing and creating jobs.

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We are therefore working to improve the business environment for companies of all
sizes through a dedicated capacity in the Presidency to reduce red tape.

If we are to make progress in cutting unnecessary bureaucratic delays for

businesses, we need dedicated capacity with the means to make changes.

I have therefore appointed Mr Sipho Nkosi to head up a team in my office to cut red
tape across government.

Mr Nkosi has extensive experience in business, including as the CEO of Exxaro

Resources, and is currently the Chairperson of the Small Business Institute.

The red tape team will identify priority reforms for the year ahead, including
mechanisms to ensure government departments pay suppliers within the required 30
days.

The team will also work with other departments and agencies to unblock specific
obstacles to investment and business growth. It will support current initiatives to
simplify processes relating to property registration, cross-border trade and
construction permits.

Infrastructure is central to our economic reconstruction and recovery.

Through innovative funding and improved technical capabilities, we have prioritised

infrastructure projects to support economic growth and better livelihoods, especially
in energy, roads and water management.

The Infrastructure Fund is at the centre of this effort, with a R100 billion allocation
from the fiscus over 10 years.

The Infrastructure Fund is now working with state entities to prepare a pipeline of
projects with an investment value of approximately R96 billion in student
accommodation, social housing, telecommunications, water and sanitation and
transport.

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Several catalytic projects to the value of R21 billion are expected to start
construction this year. Of this, R2.6 billion is contributed by government and the
balance from the private sector and developmental finance institutions.

Government will make an initial investment of R1.8 billion in bulk infrastructure,

which will unlock seven private sector projects to the value of R133 billion.

For millions of South Africans in rural areas, roads and bridges provide access to
markets, employment opportunities and social services.

Yet, many children still have to brave overflowing rivers to reach schools and
motorists have to battle impassable roads to reach the next town.

We are therefore upscaling the Welisizwe Rural Bridges Programme to deliver 95

bridges a year from the current 14.

Our South African National Defence Force is the implementing agent of the
Welisizwe programme, and has demonstrated the expertise of SANDF engineers in
bridge construction.

Earlier this week I was in Thakgalane village Limpopo to launch a new road that is
going to make a huge difference in the lives of neighbouring communities. This road
was constructed using block paving and other materials, which is a method that
enables us to build durable roads faster and more cost-effectively.

The rural roads programme will use labour intensive methods to construct or
upgrade 685 kilometres of rural road over the next three years. This social enterprise
programme includes access roads in Limpopo and Eastern Cape, gravel to surface
upgrades in Free State and North West, and capacity and connectivity improvements
in the Western Cape.

Government has initiated the process of delivering the uMzimvubu Water Project.

The project is made of the Ntabelanga Dam and Lalini Dam, irrigation infrastructure
and hydo-electric plant, Ntabelanga water treatment works and bulk distribution
infrastructure to reticulate to the neighboring communities.

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The closing date for the first of the two-stage procurement process is scheduled to
close later this month, with the preferred bidder likely to be announced in September
2022.

Government is introducing an innovative social infrastructure delivery mechanism to

address issues that afflict the delivery of school infrastructure.

The mechanism will address the speed, financing and funding, quality of delivery,
mass employment and maintenance.

The new delivery mechanism will introduce a Special Purpose Vehicle, working with
prominent DFIs and the private sector, to deliver school education infrastructure.

This approach is being piloted in schools in the Northern Cape and Eastern Cape.

Over the past year, government has built on its successful Hydrogen SA strategy to
make major strides in positioning South Africa as a global leader in this new market.

This includes the development of a Hydrogen Society Roadmap for the next ten
years as well as a Green Hydrogen Strategy for the Northern Cape, supporting the
development of a green hydrogen pipeline worth around R270 billion.

The damage caused by the theft of scrap metal and cable on our infrastructure like
electricity, trains and other vital services is enormous. We will take decisive steps
this year both through improved law enforcement and by considering further
measures to address the sale or export of such scrap metal.

An important pillar of our Economic Reconstruction and Recovery Plan is to revitalise

our manufacturing base and create globally competitive export industries.

In the past year, we launched new master plans in the steel industry, furniture and
global business services.

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Through these plans, business, government and labour are working together to
increase production and create more jobs in the sector.

In the clothing industry, a number of retailers have announced ambitious localisation

sourcing plans.

One of these retailers, Foschini, kindly made the suit that I am wearing today at its
new formal wear factory, Prestige Epping.

Five years ago, more than 80 per cent of all Foschini Group merchandise came from
the East. Today, nearly half of the merchandise is locally made.

The genuine leather shoes I am wearing were made by members of the National
Union of Leather and Allied Workers from Bolton Footwear in Cape Town and Dick
Whittington Shoes in Pietermaritzburg.

Nearly four years ago, we set ourselves a target of mobilising R1.2 trillion in new
investment over five years.

By the time of the third South Africa Investment Conference in November 2020, we
had reached R776 billion in investment commitments.

Next month, on the 24th of March, we will be holding the fourth South Africa
Investment Conference in Johannesburg.

We will showcase the many investment opportunities available as South Africa

continues its recovery from the COVID-19 pandemic, and report back on the
progress of previous commitments.

Following the resolutions of the African Union Summit over the past weekend,
trading can now begin under the African Continental Free Trade Area agreement

South African companies are poised to play a key role in taking up the opportunities
that this presents for preferential access to other African markets.

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The Free Trade agreement is about Africa taking charge of its destiny and growing
its economies faster.

We will continue to pursue Africa’s health sovereignty, working with other African
countries and international partners to support the strengthening of the continent’s
capacity to respond to pandemics.

We will increase our efforts to develop Africa’s ability to manufacture vaccines.

We have made significant progress here in South Africa.

We now have two South African companies – Aspen and Biovac – with contracts to
produce COVID-19 vaccines. Two additional vaccine projects have also been
announced.

In addition, we have full local production capability for ventilators, hand sanitisers,
medical-grade face masks and gloves and therapeutic drugs and anaesthetics.

This production capability worth many billions of rands of production annually, has
been put in place in less than two years.

South African products have been exported to other African countries, securing them
vital supplies and expanding jobs for young South Africans.

While we help existing industries to grow, we are also nurturing new opportunities for
growth and jobs.

Government and the private sector have worked closely together to grow the global
business services sector from a small group of companies to one of the world’s
leading players.

The global business services sector is on track to create 500,000 new jobs over the
next few years.

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The hemp and cannabis sector has the potential to create more than 130,000 new
jobs.

We are therefore streamlining the regulatory processes so that the hemp and
cannabis sector can thrive like it is in other countries such as Lesotho.

Our people in the Eastern Cape, KwaZulu-Natal and elsewhere are ready to farm
with this age-old commodity and bring it to market in new and innovative forms.

The social economy, including early childhood development, nursing, social work
and community services, has significant potential not only to create jobs, but to
provide vital services that communities need.

Some of the country’s mature industries also have a lot to offer in revamping the
industrial and manufacturing potential of our country.

The agriculture sector has significant potential for job creation in crops such as
citrus, table and dried grapes, subtropical fruit, avocadoes, berries and nuts.

Masterplans in the sugar and poultry industries are contributing significantly to

increased investment, improved production and transformation.

To attract investors into the mining minerals needed in the new global economy, we
will soon be finalising our mining exploration strategy.

We will continue to support the development of the upstream gas industry, as it holds
huge potential for job creation and broader economic development.

We will ensure that this is done in strict accordance with the environmental and other
laws of our country, and that where there are differences, we work together to
resolve them in the interest of our country and its people.

We live in one of the regions of the world that is most affected by climate change.

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We frequently experience droughts, floods and other extreme weather events
associated with global warming. Recently floods have affected a number of
provinces including KwaZulu-Natal, Gauteng and the Eastern Cape.

These have already caused enormous damage to infrastructure and livelihoods.

In the last year, we have made important strides in the fight against climate change,
and, at the same time, securing our economic competitiveness.

For the first time, our climate targets are compatible with limiting warming to 1.5°C.

This is the goal that all countries agreed to as part of the Paris Climate Agreement,
and is essential to prevent the worst effects of climate change.

Since I established the Presidential Climate Commission a little more than a year
ago, it has done much work to support a just transition to a sustainable, inclusive,
resilient and low-carbon economy.

At the international climate conference in Glasgow last November, South Africa

struck a historic R131 billion deal with the European Union, France, Germany,
United Kingdom and the United States.

This first-of-its-kind partnership will involve repurposing and repowering some of the
coal plants that are reaching the end of their lives, and creating new livelihoods for
workers and communities most impacted by this change.

To ensure that South Africa is able to derive the full benefit of this and other
partnerships, I have appointed Mr Daniel Mminele, a former Deputy Governor of the
Reserve Bank, as Head of the Presidential Climate Finance Task Team to lead the
mobilisation of funds for our just transition.

Properly managed, the energy transition will benefit all.

Renewable energy production will make electricity cheaper and more dependable,
and will allow our industries to remain globally competitive.

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Investments in electric vehicles and hydrogen will equip South Africa to meet the
global clean energy future.

We will be able to expand our mining industry in strategic minerals that are crucial for
clean energy, like platinum, vanadium, cobalt, copper, manganese and lithium.

We also have a unique opportunity in green hydrogen, given our world-class solar
and wind resources and local technology and expertise.

All of these measures – from structural reforms to support for SMMEs, investments
in infrastructure and the emergence of new sectors – will drive a turnaround in
economic growth driven by the private sector growth over the coming years.

We know, however, that even with the best business environment and much faster
rates of economic growth, it will take time for the private sector to create enough jobs
for the millions of South Africans who need them.

Our intent is to leave no one behind.

That is why we are expanding public and social employment.

The first two phases of the Presidential Employment Stimulus programmes, which
we launched in October 2020 have supported over 850,000 opportunities.

More than 80 per cent of participants were young people, and over 60 per cent were
women.

It has supported young women like Tracy Nkosi from Springs, who was employed as
an education assistant at Welgedag Primary School, and who says this opportunity
has motivated her to further her studies in the educational sphere.

It has also supported Mama Nosipho Cekwana from Impendle in KwaZulu-Natal who
used her farming input voucher to buy maize, manure and supplements for her
livestock.

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The total number of direct beneficiaries will soon rise to over one million South
Africans.

This includes over half a million young people appointed as education assistants,
making it the largest youth employment programme ever undertaken in our history.

The employment stimulus will also enable the Department of Home Affairs to recruit
10,000 unemployed young people for the digitisation of paper records, enhancing
their skills and contributing to the modernisation of citizen services.

The Social Employment Fund will create a further 50,000 work opportunities using
the capability of organisations beyond government, in areas such as urban
agriculture, early childhood development, public art and tackling gender-based
violence.

In addition to expanding public employment, we are providing support to young

people to prepare them for work and link them to opportunities.

To encourage hiring by smaller businesses, we will be increasing the value and

expanding the criteria for participation in the Employment Tax Incentive.

For several years, this has been an effective way to encourage companies to hire
new work seekers. The changes to the incentive will make it easier for small
businesses in particular to hire young people.

The Minister of Finance will announce the details of these changes in the budget.

We call on companies to support this effort, take up the incentive and give young
people a place in the world of work.

The SAYouth.mobi platform for young work seekers to access opportunities and
support now has more than 2.3 million young South Africans registered.

Of these over 600,000 have been placed into employment opportunities.

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A revitalised National Youth Service will recruit its first cohort of 50,000 young people
during the next year, creating opportunities for young people to contribute to their
communities, develop their skills and grow their employability.

The Department of Higher Education and Training will place 10,000 unemployed
TVET graduates in workplaces from April 2022.

In preparing this State of the Nation address I was assisted by two young South
Africans who are working as interns in the Presidency, Ms Naledi Malatji and Ms
Kearabetswe Mabatle.

They told me about the pain felt by young people who find themselves with a
qualification, but are unemployed because of lack of experience.

This forces many into jobs that have little or nothing to do with what they studied.

All of the measures I have outlined are essential to provide young people with the
work experience that they need to take their first step into the labour market.

We are calling on the private sector to support these measures – and, wherever
possible, to drop experience as a hiring requirement – to give as many young people
as possible their first job.

As we work to grow the economy and create jobs, we will expand support to poor
families to ensure that no person in this country has to endure the pain and indignity
of hunger.

Our social protection system is among the greatest achievements of the democratic
government, reaching more than 18 million people every month.

Without this support, millions more people would live in dire poverty.

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Since the onset of COVID-19, the Social Relief of Distress Grant has provided
support to more than 10 million unemployed people who were most vulnerable to the
impact of the pandemic.

Some people used that money to start businesses.

Mr Thando Makhubu from Soweto received the R350 grant for 7 months last year,
and saved it to open an ice-cream store that now employs four people.

Mr Lindokuhle Msomi, an unemployed TV producer from KwaMashu Hostel, saved

the R350 grant he received for nine months to start a fast food stall and to support
his family.

As much as it has had a substantial impact, we must recognise that we face extreme
fiscal constraints.

A fiscal crisis would hurt the poor worst of all through the deterioration of the basic
services on which they rely.

Mindful of the proven benefits of the grant, we will extend the R350 SRD Grant for
one further year, to the end of March 2023.

During this time, we will engage in broad consultations and detailed technical work to
identify the best options to replace this grant.

Any future support must pass the test of affordability, and must not come at the
expense of basic services or at the risk of unsustainable spending.

It remains our ambition to establish a minimum level of support for those in greatest
need.

Expanding access to land is vital for our efforts to reduce hunger and provide people
with meaningful livelihoods.

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We are moving ahead with land reform in terms of the Constitution, and anticipate
the approval of the Expropriation Bill during this year.

The establishment of the Agriculture and Land Reform Development Agency will be
finalised this year.

The Department of Public Works and Infrastructure will finalise the transfer of 14,000
hectares of state land to the Housing Development Agency.

We have enough arable land to support millions of thriving small-scale farmers in

poultry, livestock, fruit and vegetables.

Through the Presidential Employment Stimulus and the Solidarity Fund, over
100,000 farmers have already received input vouchers to expand their production.

This scheme has proven to be effective and impactful.

The agriculture sector has also recognised the importance of supporting small-scale
farmers and integrating them into value chains.

Through the sugar master plan, the industry has provided R225 million to over
12,000 small-scale sugar cane growers as part of a R1 billion commitment to support
black farmers.

We will be expanding the provision of input vouchers and calling on other sectors to
join this effort, so that we can collectively reach up to 250,000 small-scale farmers
this year.

None of our efforts to revive our economy will succeed if we do not tackle the
scourge of corruption once and for all.

Since the beginning of the year, I have been provided with the first two parts of the
report of the Commission of Inquiry into State Capture headed by Acting Chief
Justice Raymond Zondo.

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While the definitive conclusion has yet to be delivered at the end of this month, the
first two parts of the report make it plain that there was indeed ‘state capture’.

This means that public institutions and state-owned enterprises were infiltrated by a
criminal network intent on looting public money for private gain.

The reports have detailed the devastating effects of this criminal activity on SAA,
Transnet, Denel, South African Revenue Service and Government Communications.

State capture had a direct and very concrete negative impact on the lives of all South
Africans, but especially the poorest and most vulnerable members of our society.

It has weakened the ability of the state to deliver services and to meet the
expectations and constitutional rights of people.

We must now do everything in our power to ensure that it never happens again.

My responsibility is to ensure that the Commission report is properly and carefully

considered and then acted upon.

By no later than 30 June, I will present a plan of action in response to the

Commission’s recommendations.

We will, as the Commission’s first report recommends, strengthen the system to

protect whistle-blowers, who are a vital safeguard in the fight against corruption and
who take huge personal risk in reporting wrong-doing.

We are doing a detailed review of all applicable legislation and a comparative study
of other jurisdictions to strengthen whistle-blower protection.

The relevant law enforcement agencies are taking the necessary steps to address
the immediate concern about the safety of whistle-blowers.

Many individuals and companies that the Commission has found were responsible
for state capture must now be held to account.

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I have every confidence that the National Prosecuting Authority will carry out the
further investigations that the Commission has recommended, and that it will bring
the members of the criminal network that infiltrated government and captured the
state swiftly to justice.

The Investigating Directorate in the NPA is now poised to deliver on its crucial
mandate, and a dedicated team has been established to pursue these cases.

We will be appointing a new head of the Investigating Directorate following the

departure of Adv Hermione Cronje from that position.

An amendment to the State Capture Commission regulations in June 2020,

empowered the sharing of information between the Commission and law
enforcement agencies.

This amendment also permitted the employment of the State Capture Commission
personnel by law enforcement agencies.

These empowering provisions has geared the Investigating Directorate to more

effectively pursue the investigations emanating from the Commission.

We have gratefully acknowledged the offer of support from the private sector to
assist in providing those skills which we lack in government to enable investigation
and prosecution of crime.

To ensure that the prosecuting authority remains true to its constitutional obligation
and to ensure transparency, we are developing a framework for private sector
cooperation that will be managed through National Treasury.

There are also discussions underway with the Judiciary for the creation of special
court rolls for state capture and corruption cases.

While we have taken decisive steps to end the era of state capture, we know that the
fight against corruption is far from over.

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Even as the country was suffering the devastation of the COVID-19 pandemic,
companies and individuals were conspiring with public officials to defraud the
government of billions of rands in COVID-related contracts.

As soon as evidence emerged of this corruption we acted.

We withdrew certain emergency procurement regulations, set up a fusion centre that

brought together various law enforcement agencies, published the details of all
COVID-related contracts online and instituted the most extensive investigation that
the Special Investigating Unit has undertaken since its formation.

In December, the SIU submitted its final report on its investigation into COVID-
related contracts.

As a result, 45 matters, with a combined value of R2.1 billion, have been enrolled
with the Special Tribunal.

The SIU has referred 224 government officials for disciplinary action and referred
386 cases for possible prosecution to the NPA.

The Presidency has set up mechanisms to monitor implementation of the

recommendations of the SIU and ensure that government departments and entities
act against those who have violated regulations and broken the law.

The fight against corruption will take on a new intensity thanks to the outcomes of
the State Capture Commission, the strengthening of law enforcement agencies and
the implementation of new anti-corruption practices in the public service.

State-owned enterprises play a vital role in our economy.

From water and roads, to energy and ports, to defence and aviation, these strategic
assets are necessary to keep our country running.

It is essential that we reverse their decline, and position them to contribute positively.

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We have therefore embarked on several immediate measures to restore these
companies to health, at the same time as we undertake far-reaching reforms that will
make our SOEs more efficient, competitive, accountable and sustainable.

The Presidential SOE Council, which I appointed in 2020, has recommended that
government adopt a centralised shareholder model for its key commercial state-
owned companies. This would separate the state’s ownership functions from its
policy-making and regulatory functions, minimise the scope for political interference,
introduce greater professionalism and manage state assets in a way that protects
shareholder value.

As part of this, preparatory work has begun for the establishment of a state-owned
Holding Company to house strategic SOEs and to exercise coordinated shareholder
oversight.

To ensure that state-owned enterprises are effectively fulfilling their responsibilities,

the Presidential SOE Council is preparing recommendations on state-owned entities
to be retained, consolidated or disposed of.

Any recommendations would be subject to extensive consultation with all

stakeholders.

We are taking steps to safeguard our democracy, protect our economic infrastructure
and build safer communities for all.

Earlier this week, we released the report of the expert panel into the civil unrest in
July last year.

The report paints a deeply disturbing picture of the capabilities of our security
services and the structures that exist to coordinate their work.

The report concludes that government’s initial handling of the July 2021 events was
inept, police operational planning was poor, there was poor coordination between the
state security and intelligence services, and police are not always embedded in the
communities they serve.

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The expert panel said that if the violence has exposed anything it was the poverty
and inequality that is the root cause of the desperation of the people of South Africa.

The expert panel found that Cabinet must take overall responsibility for the events of
July 2021.

This is a responsibility that we acknowledge and accept.

We will, as recommended by the panel, develop and drive a national response plan
to address the weaknesses that the panel has identified.

We will begin immediately by filling critical vacancies and addressing positions

affected by suspensions in the State Security Agency and Crime Intelligence.

We will soon be announcing leadership changes in a number of security agencies to

strengthen our security structures.

The staffing of the public order policing unit of the South African Police Service will
be brought to an appropriate level, with appropriate training courses in place.

The ongoing damage to and theft of economic infrastructure has damaged

confidence and severely constrained economic growth, investment and job creation.

At the same time, we need to confront the criminal gangs that invade construction
sites and other business places to extort money from companies.

This requires a focused and coordinated response.

Government has therefore established specialise multi-disciplinary units to address

economic sabotage, extortion at construction sites and vandalism of infrastructure.

We will make resources available to recruit and train an additional 12,000 new police
personnel to ensure that the SAPS urgently gets the capacity it needs.

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Another area of immediate attention will be the re-establishment of community
policing forums to improve relations and coordination between local police and
residents of the areas they serve.

It is clear from the observations of the expert panel that we need to take a more
inclusive approach to assessing the threats to our country’s security and determining
the necessary responses.

I am calling on all South Africans through their various formations to participate in

developing our National Security Strategy.

I will be approaching Parliament’s Presiding Officers to request that Parliament plays

a key role in facilitating inclusive processes of consultation.

The security services have been tasked by the National Security Council to urgently
develop implementation plans that address the range of recommendations made by
the expert panel.

These measures will go a long way to address the serious concerns about the
breakdown of law and order in society.

This year, we are intensifying the fight against gender-based violence and femicide
through implementation of the National Strategic Plan on GBVF and other measures
to promote the empowerment of women.

Earlier this month, I signed into law three new pieces of legislation, which has
strengthened the criminal justice system, promoting accountability across the state
and supporting survivors.

The implementation of this legislation will go a long way to ensuring that cases are
successfully prosecuted, that survivors are protected and that there are more
effective deterrents in place.

We have made significant progress in reducing the backlog in DNA processing,

reducing it from 210,000 exhibits in April 2021 to around 58,000 at present.

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However, the fight against gender-based violence will never be won unless, as a
society, we mobilise all formations and all citizens behind a sustained programme of
social action.

As the COVID-19 pandemic has starkly demonstrated, a nation’s health is

inextricably linked with its economic progress and social development.

We will therefore continue with the work underway to ensure universal health
coverage for everyone in South Africa, regardless of their ability to pay.

While public hearings on the National Health Insurance Bill are continuing in
Parliament, much progress is being made in preparing for the introduction of NHI.

More than 59 million people are registered in the Health Patient Registration System.

By September 2021, more than 56,000 additional health workers had been recruited
and more than 46,000 community health workers integrated into the public health
system.

For the last two years, the education of our children and young people has been
severely disrupted.

As we return to normal educational activity, we will work harder to ensure that all
learners and students get the quality education they need and deserve.

Fellow South Africans,

Government must work for the people.

That is why our foremost priority is to build a capable, ethical and developmental
state.

We will soon be finalising a framework for the professionalisation of the public

service.

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This will include tighter measures for recruitment of public servants, continuous
professional development through the National School of Government and
partnerships between state bodies, professional associations and universities.

Lifestyle audits are already being implemented across the public service.

This year, we will continue with the implementation of the District Development
Model.

This Model brings all three spheres of government together with other social partners
in every district to grow inclusive local economies and improve the lives of citizens.

In particular, the DDM facilitates integrated planning and budgeting across spheres
of government and improves integration of national projects at a district level.

While there are many parts of the state that require much work, there are institutions
that continue to serve the people of this country effectively and efficiently.

One such institution is the South African Revenue Service, which will be 25 years old
this year.

While SARS was badly damaged by state capture, it has made remarkable progress
in restoring its integrity, credibility and performance.

Since its formation, SARS has collected some R16 trillion for the country’s social and
economic development. This revenue has enabled government to improve the lives
of millions through the provision of health care, education, social grants and other
basic services.

A capable state is not only about the quality of public servants and the efficiency of
institutions.

It is also, fundamentally, about how citizens are empowered to participate.

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We must work together to ensure that platforms like schools governing bodies and
community policing forums are more active and inclusive.

A vibrant civil society is crucial for a capable state and for development.

We will therefore be working with social partners to convene the long-awaited social
sector summit.

This Summit will seek to improve the interface between the state and civil society
and address the challenges that NGOs and CBOs face.

Our country has suffered several damaging blows in recent times.

A confluence of forces, many of them outside of our control, has brought us to where
we are now.

We face steep and daunting challenges.

Indeed, we are engaged in a battle for the soul of this country.

But there can be no doubt that we will win.

I ask every South African to rally together in our fight against corruption, in our fight
to create jobs, in our fight to achieve a more just and equal society.

We have faced many crises in our past, and we have overcome them.

We have been confronted with difficult choices, and we have made them.

In trying times, we have shown courage and resilience

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Time and time again, we have pulled ourselves back from the brink of despair and
inspired hope, renewal, and progress.

Now, we must do so again.

Let us forge a new consensus to confront a new reality, a consensus that unites us
behind our shared determination to reform our economy and rebuild our institutions.

Let us get to work.

Let us rebuild our country.

And let us leave no one behind.

I thank you.

ISSUED BY THE PRESIDENCY OF THE REPUBLIC OF SOUTH AFRICA

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